TMI Blog1994 (9) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 220(2) of the Act. It is stated in detail that the assessment order for the assessment year 1984-85 on total income of Rs. 21,54,740 was passed on March 30, 1987. On May 22, 1987, the Commissioner of Income-tax (Appeals) passed an order reducing the income for the assessment year 1984-85 to Rs. 4,09,589. The Department filed an appeal before the Income-tax Appellate Tribunal, Ahmedabad Bench "B" (hereinafter referred to as "the Tribunal"), and the Tribunal passed an order dated July 23, 1992, increasing the income to Rs. 12,94,380 for the assessment year 1984-85. Consequently, the respondent authority passed an order dated December 30, 1992, to give effect to the order of the Tribunal and calculated the interest under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt case as a result of the order of the Tribunal, the petitioner has paid off the amount of Rs. 3,36,401 which is the balance payable as a result of the order of the Tribunal without even any notice of demand from the Department and, therefore, there is no question of applying section 220 of the Act in the present case. It is alleged that nothing has been given in writing informing or intimating the petitioner of the basis of calculation of Rs. 3,72,852 and asking the petitioner to pay the same. It is contended that interest under section 220 of the Act can be charged after the order of the Tribunal raising the demand, and if the petitioner has not paid the said demand within 30 days of the receipt of notice under section 156 of the Act. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, Mr. Shah has relied upon the decision in the case of Shri Ambica Mills Ltd. v. ITO [1993] 203 ITR 84 (Guj) and has laid much emphasis upon the ratio of the said decision highlighting that as the provisions are absolutely unambiguous and clear, it is not necessary to refer to the decision of the Kerala High Court in the case of ITO v. A. V. Thomas and Co. [1986] 160 ITR 818 and the decision of the Delhi High Court in the case of Bharat Commerce and Industries Ltd. v. Union of India [1991] 188 ITR 277. In view of the aforesaid decision, according to Mr. Shah, the act done or caused to have been done in demanding the interest are wholly unwarranted and uncalled for. The attention of this court has been drawn to the scope of section 220(2), ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved in various reported decisions as indicated above to consider the various dimensions of the matter, we have found that section 220(2) of the Act clearly lays down that if the amount specified in any notice of demand under section 156 is not paid within the period limited under sub-section (1), the assessee shall be liable to pay simple interest at one and one-half per cent. for every month or part of a month comprised in the period commencing from the day immediately following the end of the period mentioned in sub-section (1) and ending with the day on which the amount is paid. It has been provided that, where as a result of an order under section 154, or section 155, or section 250, or section 254, or section 260, or section 262, or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch appeal or proceeding,-- (i) it shall not be necessary for the taxing authority to serve upon the assessee a fresh notice of demand; (ii) the taxing authority shall give intimation of the fact of such reduction to the assessee, and where a certificate has been issued to the Tax Recovery Officer for the recovery of such amount, also to that officer; (iii) any proceedings initiated on the basis of the notice or notices of demand served upon the assessee before the disposal of such appeal or proceeding may be continued in relation to that amount so reduced from the stage at which such proceedings stood immediately before such disposal. This section 3 has been considered in depth and detail and it has consistently been found that duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as reduced by the order which ultimately becomes final as a result of one or more proceedings taken under the Act and not at every stage of proceedings amongst the multiple appellate forums provided under the Act. In the present case, the notice of demand under section 156 was issued in pursuance of the order passed under section 143(3) of the Act. The said demand finally stood reduced to the extent order passed under section 254 by the Tribunal, though in between the Commissioner of Income-tax (Appeals) had granted greater relief in its order under section 250 of the Act. Considering the provisions of section 220(2), proviso, thereto and section 156, and keeping in view the fact that tax on income is a debt due on the closing date of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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